The NAM joined with seven other organizations in an amicus brief on 8/2/07 supporting Texas’ tort reform statute that limits the total asbestos liability of successor companies to the total gross asset value of the predecessor company at the time of the merger or consolidation (adjusted for inflation). Passed in 2003 by the state legislature in Texas, which has historically been a magnet for asbestos cases from around the country, this statute was meant to lessen the devastating effects of asbestos litigation on innocent successor companies which, according to a report published by RAND in 2005, shoulder the burden for over half of asbestos expenditures.
As the successor to a bottle cap manufacturer that had a side business involving asbestos insulation, Crown Cork & Seal has been named in numerous asbestos-related lawsuits and has spent nearly $600 million in asbestos-related costs, despite the fact that Crown itself never manufactured, sold, or installed any products containing asbestos.
We believe the statute is a valid exercise of the legislature’s power to protect the public welfare and should not be overridden by courts, who should defer to the reasonable public policy judgments of the legislature.
The Texas Supreme Court ruled 10/22/2010 that the statute unconstitutionally limited liability retroactively when applied to pending lawsuits. It found that there is a presumption against retroactive legislation, to protect settled expectations and prevent the abuse of legislative power. The court accepts retroactive legislation by considering 3 factors: "the nature and strength of the public interest served by the statute as evidenced by the Legislature's factual findings; the nature of the prior right impaired by the statute; and the extent of the impairment." Using these criteria on the facts of this case, the court found the statute unconstitutional.